Sony Pixel Power calrec Sony

Ericsson reports third quarter results 2019

17/10/2019

Third quarter highlights

Sales were SEK 57.1 (53.8) b. Sales adjusted for comparable units and currency increased by 3% driven by strong growth in North America and North East Asia. Reported sales grew by 6%.

Operating income was impacted by cost provisions of USD -1.2 b. (SEK -11.5 b.) related to a resolution of the investigations by SEC and DOJ in the US and a refund of social security costs of SEK 0.9 b., referred to as items affecting comparability in the report.

Operating income was SEK 6.5 b. (11.4% operating margin) when excluding restructuring charges and items affecting comparability. Reported operating income was SEK -4.2 (3.2) b.

Gross margin excluding restructuring charges was 37.8% (36.9%) with improvements in Managed Services, Digital Services and Networks. Reported gross margin was 37.7% (36.5%).

Net income was SEK -6.9 (2.7) b., negatively impacted by items affecting comparability.

Free cash flow excluding M&A was SEK 5.5 (0.7) b. Net cash increased to SEK 37.4 (32.0) b.

Investor Update key messages

Focused business strategy remains and the Company is tracking towards the new financial targets:

Sales ambition of SEK 230-240 b. for 2020 (previously SEK 210-220 b.), based on a SEK/USD rate of 9.50.

Operating margin target for 2020, excluding restructuring charges, remains unchanged at >10% of sales. This incorporates continued dilutive impact from strategic contracts, an initially higher cost level for newly introduced 5G products and a target adjustment for segment Emerging Business and Other to SEK -1.5 to -2.0 b. (previously break-even).

Operating margin target of 12-14% for 2022 (previously >12%), excluding restructuring charges, based on an ambition to grow faster than the market in combination with leverage from investments in market position and R&D.

SEK b. Q3

2019 Q3

2018 YoY

change Q2

2019 QoQ

change Jan-Sep

2019 Jan-Sep

2018

Net sales 57.1 53.8 6% 54.8 4% 160.8 147.0

Sales growth adj. for comparable units and currency - - 3% - - - -

Gross margin 37.7% 36.5% - 36.6% - 37.5% 35.2%

Gross margin excluding restructuring charges 37.8% 36.9% - 36.7% - 37.6% 36.5%

Operating income (loss) -4.2 3.2 - 3.7 - 4.4 3.1

Operating margin -7.3% 6.0% - 6.8% - 2.8% 2.1%

Operating income excl. restr. charges & items affecting comparability [1] 6.5 3.8 71% 3.9 68% 14.0 6.7

Operating margin excl. restr. charges & items affecting comparability [1] 11.4% 7.0% - 7.0% - 8.7% 4.6%

Net income (loss) -6.9 2.7 - 1.8 - -2.6 0.2

EPS diluted, SEK -1.89 0.83 - 0.51 - -0.67 0.01

Free cash flow excluding M&A 5.5 0.7 - 2.2 147% 11.8 1.3

Net cash, end of period 37.4 32.0 17% 33.8 11% 37.4 32.0

[1] Operating income excluding restructuring charges in all periods. Excluding cost provisions related to resolution of the SEC and DOJ investigations of SEK -11.5 b. and refund of social security costs of SEK 0.9 b. in Q3 2019. Excluding a capital gain related to the divestment of MediaKind of SEK 0.7 b. and a reversal of a provision for impairment of trade receivables of SEK 0.7 b. in Q1 2019.

Non-IFRS financial measures are reconciled to the most directly reconcilable line items in the financial statements at the end of this report.

Comments from B rje Ekholm, President and CEO of Ericsson (NASDAQ:ERIC)

We continue to see strong momentum in our business, based on the strategy to increase our investments for technology leadership, including 5G. We saw organic sales growth[1] of 3% in the quarter, driven by the early adopters of 5G, in North America and North East Asia. Our operating income was SEK 6.5 b., corresponding to a margin of 11.4% excluding restructuring costs, the SEC and DOJ provision of USD -1.2 b. (SEK -11.5 b.) and the refund of social security costs of SEK 0.9 b. Free cash flow before M&A was SEK 5.5 (0.7) b. adding to our strong financial position.

Our focused strategy, introduced in 2017, is aimed at building a stronger Ericsson longer term. With clear focus on our operator customers the strategy stands on a foundation of increased investments in R&D for technology and cost leadership, and growing market footprint. Increased R&D efforts, which will continue, have resulted in a competitive portfolio driving improved gross margin. In addition, we have been able to record several important wins improving market footprint for future business. We are disciplined in the deals we take and target opportunities where we have a clear competitive advantage through technology leadership, supported by our improved cost structure in hardware and software. While we believe the strategic contracts are attractive long term, the initial margins may be challenging. This is due to high associated costs as operators change vendors.

An important indicator for our execution of the strategy is the improvement in gross margin. The gross margin[2] in the quarter ended at 37.8% compared with 36.9% last year and 36.7% last quarter. Within the 0.8 percentage point[3] sequential decline in Networks gross margin, we have absorbed the margin impact and inventory provisions related to strategic contracts.

The largest market for 5G infrastructure will be China where deployments are expected to start near term. We have invested to increase our market share, however it is still too early to assess possible volumes and price levels. Based on historic experience we expect to have challenging margins initially but positive margins over the lifespan of a contract.

With an organic sales growth[1] of 4%, segment Networks delivered another solid quarter, with strong development in North America. Operating margin improved YoY, with continued good traction for the Ericsson Radio System.

The turnaround of Digital Services is on track for low single digit margins in 2020. Dr
LINK: https://wcm-com.ericsson.net/en/press-releases/2019/10/ericsson-report...
See more stories from ericsson

Most recent headlines

03/06/2024

Dalet and Veritone Reach Agreement to Distribute, Transact and Monetize Media Archives

Dalet, a leading technology and service provider for media-rich organizations, a...

18/03/2024

USC Basketball Star Juju Watkins on Fashion, Film, Friendship Bracelets, and More

Listeners turn to Spotify to connect with their favorites-from artists and album...

18/03/2024

Young professionals successfully complete vocational training at SGL's Meitingen site

Seven young professionals completed their vocational training at SGL Carbon in M...

18/03/2024

Vintage Allure

Released this past January, the music video for Ariana Grande's yes, and? brings a modern approach to vintage allure. The video was directed by Christian ...

18/03/2024

ST Engineering iDirect Unveils Intuition at SATELLITE 2024 Conference and Exhibition

Global satellite communications leader gives market a first look at its next-gen...

18/03/2024

Box to Box Films shares with MediaSilo

Box to Box Films Shares with MediaSilo Amy and Drive to Survive producer updates collaborators simply and securely Boston, MA, March 18, 2024 - Box to Box Fi...

18/03/2024

Telestream Introduces AI-Powered Tools for Rapid Content Delivery at NAB Show 2024

Telestream Introduces AI-Powered Tools for Rapid Content Delivery at NAB Show 20...

18/03/2024

Docufiction Film Bringing Down a Mountain Edited with DaVinci Resolve Studio

Docufiction Film Bringing Down a Mountain Edited with DaVinci Resolve Studio Brie Clayton March 18, 2024 0 Comments Blackmagic Design today announced ...

18/03/2024

FingerWorks Telestrators Releases Enhancements to Computer Vision Live Tracking Software at NAB 2024

FingerWorks Telestrators Releases Enhancements to Computer Vision Live Tracking ...

18/03/2024

DirecTV to Allow Subscribers to Opt Out of Local Stations

DirecTV announced a new feature over the weekend that will allow its subscribers to opt out of their local stations in return for a discount. Customers who ch...

18/03/2024

Logging and reviewing: Moving towards a sustainable workflow

Jane Sung, COO at Cinedeck, explains how broadcasters and content production companies can achieve the goal of moving towards creating a more sustainable, effic...

18/03/2024

Altice Media sold to French shipping tycoon for 1.55 billion

The deal includes BFM TV, one of the country's largest 24-hour news channels, as well as documentary channel RMC D couverte, and RMC Story By Jenny Priestl...

18/03/2024

Meet the CEO and founder

By TVBEurope Staff Published: March 18, 2024 Nick Franco tells TVBEurope how he went from being a master plasterer and refurbishing the ornate plasterwork ...

18/03/2024

Master the Avatar State: Glowing Eyes in Adobe After Effects

Master the Avatar State: Glowing Eyes in Adobe After Effects Levi Borland March 18, 2024 0 Comments In this step-by-step tutorial, learn how to recrea...

18/03/2024

Next Season of Doctor Who' on Disney Plus May 10

The next season of Doctor Who, with Ncuti Gatwa as the 15th Doctor, premieres on Disney Plus and around the world May 10. It is the first season to launch on Di...

18/03/2024

Screen Australia and VicScreen launch new Screen Careers initiative

18 03 2024 - Media release Screen Australia and VicScreen launch new Screen Careers initiative LTR Denise Eriksen, Esther Coleman Hawkins, Caroline Pitcher, K...

18/03/2024

CBC/WRAL Night Helps Bring in Over $26k for PBS NC

Capitol Broadcasting and WRAL-TV continued a decades-long tradition of supporting PBS North Carolina, our state's public television station, to good result ...

18/03/2024

Banglalink Gets Unified Licence to Deliver Superior Digital Services in Bangladesh

18 Mar 2024 Banglalink Gets Unified Licence to Deliver Superior Digital Service...

18/03/2024

Thuraya partners with Niflink to deliver telemedicine and eLearning to users across its network

Abu Dhabi, 18 March, 2024 : Abu Dhabi, 18 March 2024: Thuraya Telecommunication...

18/03/2024

Thuraya partners with Niflink to deliver telemedicine and eLearning to users across its ne...

Abu Dhabi, 18 March, 2024 : Abu Dhabi, 18 March 2024: Thuraya Telecommunication...

18/03/2024

Major League Soccer: IMG on Capturing Fan Rituals and Delivering Consistent Coverage

Major League Soccer: IMG on capturing fan rituals and delivering consistent cove...

18/03/2024

Smashing Padel: Inside Aurora's Innovative Production of the Inaugural Hexagon Cup

Smashing padel: Inside Aurora's innovative production of the inaugural Hexag...

18/03/2024

Airspeeder Teams Up With EMG for World's First Live Broadcast of Flying Car Series

Airspeeder teams up with EMG for world's first live broadcast of flying car ...

18/03/2024

Netflix Announces News About 26 Upcoming Nordic Titles - Including 12 Brand New Titles

Back to All News Netflix Announces News About 26 Upcoming Nordic Titles - Inclu...

18/03/2024

Final sprint in the AS4 market communication

Final Sprint in the AS4 Market Communication: All Arvato Systems Customers Are Ready to Go Customers for market communication AS4-ready Arvato Systems is now...

18/03/2024

Tonight on Uzalo: Nkunzi takes a drastic decision

Tonight on Uzalo: Nkunzi takes a drastic decisionDon't miss Monday, 18 March's riveting episode of South African soapie Uzalo on SABC 1 on DStv channel ...

18/03/2024

Thales to modernize Montreal Mtro blue Line,improving passengers' punctuality and train reliability

Facebook Twitter LinkedIn Following a call for tenders, the Soci t de tra...

18/03/2024

Streaming today: Vida the Vet' on Netflix - 18 March 2024

Streaming today: Vida the Vet' on Netflix - 18 March 2024Looking for something to watch tonight? Check out all the new streaming releases from all your fav...

18/03/2024

Skeem Saam': Is Tobias Maswahla Evelyn's son?

Skeem Saam': Is Tobias Maswahla Evelyn's son?Is actor Sicelo Buthelezi's character Tobias Maswahla related to Deputy Principal Evelyn Maswahla in S...

18/03/2024

Tonight on Generations: Khensani tries to mend his friendship with Sphe

Tonight on Generations: Khensani tries to mend his friendship with SpheDon't miss Monday, 18 March's riveting episode of South African soapie Generation...

18/03/2024

Question: Did George Lucas rip off Dune?

Question: Did George Lucas rip off Dune?Miles Phillips explores Dune's Legacy and its echo in Star Wars, claiming that the former is among the best science ...

18/03/2024

Tonight on Skeem Saam: Jacobeth kicks Bullet to the curb

Tonight on Skeem Saam: Jacobeth kicks Bullet to the curbDon't miss Monday, 16 March's riveting episode of South African soapie Skeem Saam on SABC 1 on D...

18/03/2024

Tonight on Muvhango: Matshidiso finds incriminating information on Nkele

Tonight on Muvhango: Matshidiso finds incriminating information on NkeleDon't miss Monday, 18 March's riveting episode of South African soapie Muvhango ...

18/03/2024

Tonight on Smoke and Mirrors: In a haze of alcohol, Sakhile knocks down Fanyana

Tonight on Smoke and Mirrors: In a haze of alcohol, Sakhile knocks down FanyanaDon't miss Monday, 18 March's riveting episode of South African soapie Sm...

18/03/2024

Tonight on Scandal: Jojo's bad PR costs him more than he can afford

Tonight on Scandal: Jojo's bad PR costs him more than he can affordDon't miss Monday, 18 March's riveting episode of South African soapie Scandal! o...

18/03/2024

Tonight on Champions: Lebo's family are tearing him apart

Tonight on Champions: Lebo's family are tearing him apartDon't miss Monday, 18 March's riveting episode of South African soapie Champions on Mzansi ...

18/03/2024

Tonight on Gqeberha: Msimelelo lays down the rules at the Tshisa Nyama

Tonight on Gqeberha: Msimelelo lays down the rules at the Tshisa NyamaDon't miss Monday, 18 March's riveting episode of South African soapie Gqeberha: T...

18/03/2024

Tonight on Umkhokha: Zisebenzele makes a bet with Khululiwe that Siphamandla will do it within a week

Tonight on Umkhokha: Zisebenzele makes a bet with Khululiwe that Siphamandla wil...

18/03/2024

Cyberani and Thales enter a strategic alliance to strengthen the Kingdom's cybersecurity

Facebook Twitter LinkedIn Mr. Saeed Al Saeed, CEO of Cyberani, and Mr. Pie...

18/03/2024

Thales to equip Cibao International Airport in Dominican Republic with new Air Traffic Control Radar System

Facebook Twitter LinkedIn Instituto Dominicano de Aviaci n Civil (IDAC) se...

17/03/2024

WATCH: Highlights from the 2024 Cape Town Carnival [video]

WATCH: Highlights from the 2024 Cape Town Carnival [video]The Mother City's biggest annual street parade returned to Green Point on Saturday with the Cape T...

17/03/2024

WATCH: Highlights from the 2024 Cape Town Carnival

WATCH: Highlights from the 2024 Cape Town CarnivalThe Mother City's biggest annual street parade returned to Green Point on Saturday with the Cape Town Carn...

17/03/2024

Young Papi leaves Big Brother Mzansi'

Young Papi leaves Big Brother Mzansi'Young Papi was the thirteenth housemate to get evicted from the Big Brother Mzansi' reality TV show on Sunday, 17...

17/03/2024

Smoke and Mirrors': Why Thandiswa might dump Caesar

Smoke and Mirrors': Why Thandiswa might dump Caesar Smoke and Mirrors' spoilers reveal that Caesar will propose marriage to Thandiswa. Will she stay wit...

16/03/2024

Josh Brolin Drama Outer Range' Returns To Prime Video May 16

Western drama Outer Range is back with season two on Prime Video May 16. Josh Brolin stars and executive produces. He also directs the season's penultimate ...

16/03/2024

Kristen Wiig Lined Up to Host SNL' for Fifth Time

Kristen Wiig hosts Saturday Night Live for the fifth time on April 6. Wiig stars in and executive produces Palm Royale, which premieres March 20 on Apple TV Plu...

16/03/2024

Magnite, Mediaocean Join To Make Buying CTV Campaigns Easier

Media buyers using Mediaocean's Prisma platform will be able to plan, execute and reconcile ad campaigns on connected TV directly from programmers who work ...

16/03/2024

Bitmovin, Yospace Combine To Insert Ads Into Live Streams

Streaming infrastructure company Bitmovin is teaming up with ad-insertion vendor Yospace to enable broadcasters to put commercials in live-streaming programming...

16/03/2024

Bumble Engages Peacock's The Traitors' To Promote Dating Deception Detector'

Bumble, the dating service, has tapped into Peacock's murder-mystery competi...

16/03/2024

Gerald Levin, Former Time Warner CEO, Has Died

Gerald Levin, former CEO of Time Warner, died March 13. He was 84 and had battled Parkinson's disease....